America and China: A tale of two big carbon emitters

The worst of times in the US for climate action needn't be the best of times only for China

- LEENA SRIVASTAVA

As the US accounts for over a quarter of the world's economic output and well over half the market value of all companies whose shares are listed for public trading globally, it is unsurprising that major policy developments there have the rest of us riveted. The passing of America's One Big Beautiful Bill (BBB) was no exception. Given concerns over the distributional effects of this legislation in the US, the world is keenly watching for the political fallout of hard-right approaches as also societal responses to the country's pullback from clean energy in favor of conventional fossil fuels at the cost of climate action.

Dilutions of the Bill's provisions for it to pass the US Senate signal that even with the majority enjoyed by the Republican Party in both Houses of Congress, rolling back the country's energy transformation is not easy. For example, wind and solar projects would continue to be eligible for tax credits as long as they begin construction by June 2026 or are put into service by the end of 2027. Provisions on sourcing from "Foreign entities of Concern," the focus of which is mostly on China, were also diluted. While federal subsidies for electric vehicles (EVs) are to be phased out by end-September, incentives for charging infrastructure will continue till June 2026. And, significantly, the budget for building strategic petroleum reserves has been slashed.